Natural Gas Falls 2.66%

Natural gas prices dropped 2.66% on Wednesday, settling at $3.32 per MMBtu, as rising production and warmer weather forecasts triggered fresh selling in the market.

Record LNG exports and lower storage levels could offer medium-term support

What’s Dragging Natural Gas Prices Down?

1. Higher Production

U.S. natural gas output continues to climb. So far in April, production in the Lower 48 states has averaged 106.3 billion cubic feet per day (bcfd)—a slight uptick from March’s all-time high of 106.2 bcfd. This consistent rise in supply puts pressure on prices.

2. Milder Weather

Forecasts now show warmer-than-normal temperatures across much of the U.S. through April 29. That means less demand for residential heating, which typically supports prices during colder months.

• Less heating demand = lower consumption = downward pressure on prices.

3. Bearish Storage Data

Gas storage levels are also adding to the weakness. U.S. utilities injected 57 billion cubic feet (bcf) into storage last week. While this was slightly below forecasts of 60 bcf, it’s still well above the five-year average of just 17 bcf. More gas in storage during a low-demand period suggests oversupply.

The Bullish Side: Record LNG Exports

There’s one bright spot keeping prices from falling further—Liquefied Natural Gas (LNG) exports.

U.S. exports to LNG terminals hit a record 16.3 bcfd in April, thanks in part to the new Plaquemines facility in Louisiana ramping up operations. This strong export demand helps soak up some of the extra supply from rising domestic production.

Also, while storage is building, total gas in storage is still 19.7% below last year’s level and 2.1% below the five-year average. That could act as a price floor in the medium term if production slows or demand spikes.

What Traders Should Watch

According to the EIA, both production and consumption are expected to reach record levels in 2025:

• Production: 104.6 bcfd
• Consumption: 90.7 bcfd

This means the market could remain tight depending on how fast LNG demand grows and how weather patterns evolve in the second half of the year.

NatGas Technical View: Support and Resistance

Natural gas is currently showing fresh selling pressure, with open interest rising 5.49%—a sign that new short positions are entering the market. Watch these levels:

• Support: $3.287 and $3.166
• Resistance: $3.36 ; a breakout above could lead to $3.45

Bottom Line

Natural gas is under pressure for now, thanks to rising supply and weaker short-term demand. However, record export flows and below-average storage may limit the downside in the coming weeks. Traders should keep an eye on weather updates, storage data, and any changes in LNG activity as key drivers for the next move.